Canadian dollar strengthens with oil, U.S. jobs data boosts sentiment

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch

TORONTO (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday as oil prices moved higher, while robust U.S. jobs data boosted sentiment.

Oil prices drew support from declines in U.S. crude oil inventories, although a glut of refined products and economic growth concerns loom over the market.

At 8:59 a.m. EDT (1259 GMT), the Canadian dollar CAD=D4 was trading at C$1.2924 to the greenback, or 77.38 U.S. cents, stronger than the Bank of Canada’s official close of C$1.2959, or 77.17 U.S. cents.

The currency’s strongest level of the session was C$1.2913, while its weakest level was C$1.2982.

U.S. private payrolls increased more than expected in June and fewer Americans applied for unemployment benefits last week, suggesting a rebound in job growth after May’s paltry gains, two separate reports showed.

That added to services industry data from Wednesday that showed surging new orders and hiring, suggesting the U.S. economy regained speed in the second quarter.

Canada conducts most of its international trade with its southern neighbor.

Meanwhile, the value of Canadian building permits issued in May unexpectedly dropped by 1.9 percent from April, Statistics Canada data indicated on Thursday.

The federal statistics agency has not collected jobs data for Fort McMurray since the Alberta city was engulfed by wildfire in May, and has not decided when to resume the survey there.

Jobs data for June is due out on Friday in both Canada and the United States.

The Canadian dollar was outperforming most of its key currency counterparts, although sterling recovered from its three-decade long lows in the wake of the British vote to leave the European Union.

Canadian government bond prices were lower across the maturity curve, with the two-year CA2YT=RR price down 2.5 Canadian cents to yield 0.498 percent and the benchmark 10-year CA10YT=RR falling 29 Canadian cents to yield 1.003 percent.